Monday, October 3, 2016

When David Uihlein Came to Oshkosh

“This is the fulfillment of a dream that has been mine since I was a boy – to own and operate my own brewery.”
- David Uihlein, Brewers Digest, January 1963

David Uihlein (pronounced EE-line)

Here’s to dreams...

In February 1961, David Uihlein was in negotiations to purchase controlling interest of the Oshkosh Brewing Company. On the other side of the bargaining table were OBC’s president, Arthur Schwalm, and vice-president, Earl Horn. Horn and Schwalm were also the brewery’s principal shareholders. Their families had been engaged in brewing in Oshkosh for generations. That was about to end. Horn and Schwalm were ready to cash out.

Arthur L. Schwalm (left) Earl S. Horn (right)

In June 1961, the sale hit a snag when 76-year-old Arthur Schwalm died unexpectedly. But by the end of summer a deal had been worked out. On August 16, 1961, came the announcement that David Uihlein was taking over the Oshkosh Brewing Company.

The sale of OBC was front page news in Oshkosh. The story ran in newspapers across the state. A familiar refrain appeared in the reports: David Uihlein was fulfilling his dream, he had always wanted to own a medium-sized brewery.

Oshkosh Daily Northwestern, August 16, 1961

People in Oshkosh were skeptical. It didn’t add up. Uihlein was a member of the family that held controlling interest in the Jos. Schlitz Brewing Company. Schlitz was then the second largest brewery in the nation. Why would the heir to a dynasty meddle with a small brewery in Northeast Wisconsin? Was he acting in concert with Schlitz? Was Uihlein here to plunder Oshkosh’s largest brewery?

Uihlein insisted that wasn’t the case. He may have even meant it. At that moment, Uihlein’s plan for OBC was crumbling around him. That plan wouldn’t be revealed for another 14 years.

In 1975, the Wall Street Journal published a fawning profile of Robert Uihlein, Schlitz president and David Uihlein’s first cousin. Robert Uihlein had been named president of Schlitz in February 1961 – about the same time David Uihlein began negotiating the purchase of OBC. The 1975 Wall Street Journal article includes a curious aside that sheds light on David Uihlein’s intentions for the brewery in Oshkosh:

Bob Uihlein had some firm ideas about what needed to be done at Schlitz, and he indicated to directors that he wouldn’t tolerate too much family interference. To his dismay, he ran into a family problem at the first board meeting after he became president. A cousin, David V. Uihlein, who had earlier acquired a small brewery, wanted to sell it to Schlitz.“I let the other know in no uncertain terms that I didn’t want that tea kettle rammed down my throat the first day on the job,” he recollects. “We didn’t buy it, but I had to spend an entire Saturday afternoon at my house convincing David that his brewery would never make it.” (Which it didn’t.)

- Wall Street Journal, January 3, 1975

Back in 1961, David Uihlein was telling a different story to people in Oshkosh. He was redirecting the narrative. He was talking about his dreams. But Uihlein was stuck. He had a brewery on his hands that he apparently didn’t want. What followed isn’t altogether surprising. Within six years of his arrival, the thriving brewery Uihlein had purchased was on the verge of collapse.

To give Uihlein his due, he initially appeared to have done his best to maintain the prosperous brewery he had taken over. Perhaps he was still hoping to court a suitor. He invested in new equipment, initiated a new marketing campaign, and tried to expand the brewery’s distribution. It came to nothing. This was a man inherently unsuited for the leadership of a regional brewery.

A series of blunders, including changing the recipe for Chief Oshkosh Beer, resulted in a constant erosion of beer sales beginning in 1964. In 1960, the year before Uihlein became president of OBC, the brewery produced over 58,000 barrels of beer. In 1969, the year Uihlein sold the brewery, production had fallen by more than 40% to less than 34,000 barrels.
Recipe link: http://oshkoshbeer.blogspot.com/2015/11/wilbur-strottman-and-ruin-that-became.html

Chief Oshkosh wasn’t the only Wisconsin brand of beer to wither under Uihlein’s hand. In 1966, he purchased the label rights for Rahr’s of Green Bay, Liebrau of Two Rivers Brewing, and Badger Brew of Effinger Brewing in Baraboo.

The three Wisconsin breweries that brewed these beers had recently ceased operations. But in the year prior to their closing they had produced a combined total of more than 40,000 barrels of beer. The acquisition and production of these brands should have resulted in a significant increase in OBC’s output. The maneuver proved fruitless. Production and sales at OBC continued their steady decline.

Two years after Uihlein left Oshkosh, OBC closed. Uihlein was back in Milwaukee then. There he joined the board of directors of Schlitz where he helped shepherd the most dramatic brewery failure in American history. One would assume that at that point David Uihlein stopped dreaming of breweries.

2 comments:

I was an engineer at Miller brewing in Milwaukee during the "Schlitz meltdown". A number of really good professionals left Schlitz for Miller. They were incredulous as to what was happening to Schlitz. Very good and talented people. Miller welcomed they're knowledge and used it to help grow the company. I actually heard Miller executives lamenting the fact that Schlitz was squandering their hard earned reputation. They made a concerted effort to hire long time Schlitz people.